the $31bn question which Dr Jonathan ought to answer. by Nasir Elrufai

When I wrote an article in 2011, stating
that the government of President
Goodluck Jonathan was spending two
billion naira every day, including
weekends, on security without
commensurate returns on the lives of
Nigerians, the president’s reaction was
to have his then chief goon, General
Awoye Azazi, arrest and detain me for
publishing ‘misleading information’. In
retrospect, I agree with the accusation –
because the amount I stated hugely
understated the grand larceny going on
in government.
An opening into what is really going on
in government was provided a few days
back by the Punch newspaper, which
found that a staggering 5 trillion naira –
or $31bn has been stolen under
Jonathan’s 30-month stewardship of our
nation’s affairs.
Assuming that Jonathan has been in
power since May 2010, that works out to
an incredulous $1bn stolen each month.
If you add the average borrowing of
another $1bn per month since Jonathan
took office, then the true scale of the
epic theft becomes clearer.
President Jonathan is making a mockery
of himself if he continues to insist his
government is determined to fight
corruption, or that Nigeria under his
watch has not finally lost the war on
graft. It is no accident that Nigeria is
perceived as the second most corrupt
country in the world by a recent Gallup
poll. According to International audit
firm KPMG, the cost of fraud in the first
half of 2012 alone is $1.5bn (N225bn),
the highest on the African continent. And
that is only because they have no real
idea of what is going on in government
circles While Nigeria is ranked third
behind USA and China in backlogs of
orders for personal private jets, the
Economic Intelligence Unit (EIU) asserted
that our nation is the worst place to be in
2013 due to deteriorating indicators of
human security.
One day, we read that billions of naira of
pension funds have been stolen, and the
next, it becomes trillions of unbudgeted
fuel subsidy monies. It seems Nigerians
have simply gotten numb to these
figures, or have not appreciated the
opportunity cost of the sums being
stolen in terms of goods and services
forgone. To put things in context, if one
spends one hundred thousand naira
daily, it will take about 53 years to spend
one billion naira! A billion dollars is of
course some 150 billion naira, so go
ahead and do the math.
In short, what would $31bn do for
Nigeria or Nigerians? For a person who
lives for 100 years, he would have to
spend the sum of $310m dollars a year
for an entire century – near a million
dollars a day, weekends included to
finish it all. And if he decides to join the
league of private jet owners, that
amount would purchase 1,550 planes at
an average cost of $20m each.
If the funds were to be used to finance
the operations of the Nigerian
government, the $31bn sum effectively
covers Nigeria’s N4.8trn 2012 budget
with a leftover of about N200bn. And is
only less than N1 billion short of the
proposed N4.92trn budget for 2013.
From another perspective, according to
an MoU signed by government this year,
6 refineries would be constructed in
modular forms within 30 months at a
cost of $4.5bn. Each refinery would
process 30,000 barrels of crude per day
with an output of 5 million litres of
gasoline. This means that with $31bn
about 41 new refineries can be built.
The immediate implications of that are:
the very volatile fuel scarcity situation
existing all over Nigeria would be solved.
And hundreds of billions of naira that
are ordinarily stolen annually in the
guise of fuel importation would be
saved. Similarly, of the 41 refineries, one
would be sited in every Nigerian state,
with an extra five clustered or evenly
distributed around larger consumption
centres like Lagos, Ibadan, Kano and
Abuja. There is simply no telling how
many jobs this would create for Nigeria’s
tens of millions of unemployed citizens.
And speaking of employment, some of
the decisions by this government are
simply confounding because the MoU for
the refineries indicated that 6 months of
construction work will be done in
America, followed by one month of test-
running and dismantling of the refinery.
Another month is provided for
transporting the dismantled refinery,
and an extra 4 months to reassemble the
plant and commence production. Not
one Nigerian job will be created in the
construction of the refineries for which $
4.5bn was to be spent! And like
everything with this hapless
administration, nothing has been heard
of the construction of these modular
refineries, only a report of yet another
committee on refineries.
The design and construction of rail
services in Abuja which the Obasanjo
administration awarded in 2007 and due
to have been completed in 2010 was
recently “re-approved” by the Federal
Executive Council for about the same it
was originally awarded – some $823m,
less than a billion dollars. The vanished
$31bn would have conveniently
provided a project similar to the Abuja
light rail system for 32 of our 36 states.
Imagine the jobs we would have created,
the savings on road repairs, reduction in
accidents, cost of transportation and
improvement in the standards of living
we would have had.
Similarly, what became the Primus
Specialist Hospital in Abuja, was
awarded for less than N5 billion by the
FCT Administration, and reportedly
finally completed at multiples of the
original price. Assuming it would cost
N100 billion to build and equip such a
facility, it would mean that if the looted $
31bn was channelled into healthcare, it
would have comfortably built about 31
hospitals of that calibre. And if it had not
been inflated, the same amount might
have built a world class hospital in every
state capital with the best equipment
anywhere. Incidentally, the First Lady
would not have had to go to any German
hospital for any reason. Nigeria would
also have saved the N450 billion we lose
annually, travelling overseas for medical
treatment.
In the last two fiscal years, less than N20
billion have been budgeted annually for
the capital needs of all federal
universities. Between 2004 and 2007,
the FCT administration and the
Petroleum Technology Development
Fund contributed about 200 hectares of
land plus $10 million, and $25 million
respectively as virtually sole contribution
to the set-up of the African University of
Science and Technology (AUST), Abuja.
With the stolen funds, the federal
government would have financed the
capital programmes of all federal
universities for some 250 years! And if
the same funds were applied to building
new universities, we could easily have
got at least 60 AUST- like institutions up
and running all across the country.
From every perspective one looks at it,
the amount of stolen funds would have
improved the lives of Nigerians: if the $
31bn had been invested in road
construction, Nigeria would have
emerged with one of the best road
networks in all of Africa; even at the
reported N89.53bn at which the Lagos
Ibadan expressway was ‘concessioned’
in 2009, the amount would have
translated into about 525,500km of
roads, several multiples of the paved
road network we now have nationally.
Meanwhile, was it not this administration
that set up an assessment committee to
look into cases of abandoned Federal
government projects? The final report of
the committee can be summed up in 2
points: there are 11,886 abandoned
federal projects across Nigeria, and it
would cost an estimated N7.78 trillion to
complete these projects. With the $31bn
in stolen funds, Nigeria would have
successfully completed about 65% or
some 7,000 abandoned projects all
across Nigeria that would create jobs
and improve our standards of living.
The report of the committee has not
been implemented; instead, President
Jonathan recently sent a letter to the
National Assembly requesting approval
to borrow $7.9bn to fund a pipeline of
projects between 2012 and 2014. This is
not to say borrowing money to fund
national developmental priorities is a
bad idea. But we all know that most of
these monies will add up to the
Jonathanian statistics of stolen funds.
On the issue of debt, if we add the
proposed borrowing to our currently
known $5.7bn debt burden at the end of
2011, our external debt stock would rise
to $13.6bn by 2014. It leaves little to
wonder if Nigeria can sustain servicing
its rising debt profile. Curiously, the
proposed foreign borrowing and the
requests were not included in the 2012-
2015 Medium Term Expenditure
Framework presented to the National
Assembly last year by the President
himself, thereby violating the Fiscal
Responsibility Act 2007.
The most frightening aspect of the $
31bn question is: what if international
and reputable audit firms had been
engaged to audit Nigeria’s accounts not
just at the federal, but also at state and
local government areas? What would
have been the findings? It is not hard to
imagine that Nigeria would have been
labelled the world’s most corrupt
country by far, without a close second.
What should concern every Nigerian is
that the President knows where mass
fraud is being perpetuated, yet chooses
to ignore the goings on. Why else have
all the reports on the petroleum subsidy
fraud only resulted in more ad-hoc
committees, and then white paper
committees whose reports are never
ever published, and then finally
abandoned to gather dust with no
pretext at even attempting to implement
any of the recommendations? No
wonder, Dr. Faruk Lawan had to be
compromised, while deliberate attempts
were made to discredit the Ribadu Task
Force report.
If the President wants to be regarded
with any vestige of respect now or in the
future, he must rise up with some spine,
face corruption squarely and fight it with
sincerity. He must de-emphasize reliance
on foreign and domestic borrowings that
simply line up the pockets of the lenders
and the few unpatriotic Nigerians
serving their interests. He must order
the Debt Management Office to publish
information on existing loans, tie them to
the projects for which they were
obtained, and make this information
public to all Nigerians on a regular basis.
In the meantime, what most Nigerians
simply want to know from the president
is what happened to N5trillion in 30
months. That is the $31bn question
which Dr Jonathan ought to answer.